Cable Operators Want More Choice

7/23/2012 12:01 AM Eastern

By: Robert Gessner

Recent disputes between TV networks and distributors(like the Viacom-DirecTV dispute settledlast Friday) have generated news reports,editorials and blogs about the need for moreconsumer choice in the selection of TV programming.It is time to set the record straightabout who supports more choices for consumersand who does not.

BET founder Robert Johnson made somenews with a bold statement to the media theother day. He predicted the demise of pay TV’sbig programming package within two or threeyears, saying inexorable pressure from online services likeNetflix and Hulu will compel cable and satellite TV providersto offer their customers smaller video packages.

Mr. Johnson is correct that TV networks must be unbundledto create more choices for consumers, but creating thatchoice must start at the source: with content providers. PayTV providers — be they cable, satellite or telephone company-backed distributors — each want to give consumersmore choices. Content providers simply will not allow thatincrease in consumer choice. So, someone or somethingmore powerful than these dominant content giants mustforce these content companies either to unbundle their networksor unlink the bundles of bundles called basic cable.

Ten companies control most of the TV channels in theU.S. Mr. Johnson correctly notes that 17 of those channelsaccount for most of the viewing. Yet content providerswork tirelessly to keep their dozens ofnetworks tightly bundled together. That’s whybasic cable has 100 channels, of which consumerswatch only a dozen.

All programmers want to be guaranteedfull distribution on basic cable. This practiceof bundling networks (owned by the same contentprovider) and then linking them to otherbundles (owned by other content providers) ensuresthat all of the content providers have fulldistribution to all consumers. It reduces consumerchoice and raises cost. Distributors areunable to break apart either the bundles or the bundle ofbundles because the content providers will not allow it.

This battle is finally starting to attract Congress’ attention.When it reaches a crisis stage, Congress will respond.

Distributors support more choices for consumers andare ready to deliver it. Content providers do not supportmore consumer choice. It is time consumers, Congressand the media understand that difference.

Robert Gessner is president of Massillon Cable andvice chairman of the American Cable Association.